Compliance Economic Review
Pursuant to section 120.745(5), Florida Statutes
Rule 69K-20.001, Florida Administrative Code
Report of Cases Embalmed or Bodies Handled
Department of Financial Services
Board of Funeral, Cemetery, and Consumer Services
March 30, 2012
JUSTIFICATION FOR THE RULE
Rule 69K-20.001 is mandatory pursuant to sections 497.382 and 497.606, Florida
Statutes.
Rule 69K-20.001 implements statutory requirements that each month each licensed
funeral establishment, cinerator facility, centralized embalming facility, and direct
disposal establishment, file with the Division of Funeral, Cemetery, and Consumer
Services a report providing the name and other specified information on every decedent
whose remains passed through that establishment or facility in that month.
The requirement for these monthly reports has been in the statutes since 1979. This
rule or prior versions of same have likewise been in effect since approximately 1979.
The rule has never been controversial within the deathcare industry.
It is believed that the legislative rationale for requiring these reports was to establish a
minimum standard of recordkeeping by funeral homes, etc., as to where particular
human remains were received and processed, and which licensed professional in that
facility was responsible for the handling and treatment and work regarding the remains,
in the event of complaint by family members and/or a dispute as to the responsible
entity and licensed professional.
STATEMENT OF ESTIMATED REGULATORY COSTS
ECONOMIC ANALYSIS
There are approximately 1,104 businesses subject to the rule, composed of 865 funeral
establishments, 169 cinerator facilities, and 70 direct disposal establishments.
The Division estimates that approximately 25% (276) of the affected businesses that file
the reports use a consolidated computer software program or a suite of related
programs to run their business. Where this is the case, the affected business enters
information concerning the deceased into the system for invoicing, accounts receivable,
and other business purposes, and the information, once entered, is available and used
to produce these monthly reports. These software programs have a function (a button)
to produce these monthly reports. For affected businesses using such software, there
is no significant additional cost to produce the reports. The Division estimates that
production of the report by affected businesses in this category takes ten minutes per
month. If the value of the business' staff time is set at $15 per hour, the report costs
$2.50 to produce. The business must then have each licensed professional staff
member (funeral directors and embalmers) review and sign the report. Affected
businesses in this category tend to be the larger affected businesses and may have four
to six professionals who must review and sign the monthly report. The Division
estimates that it takes two minutes for each professional to review and sign the form. If
the professional's time is valued at $30 per hour, the cost per professional is $1 per
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month. If the affected business has five professionals who must review the report, the
amount of $5 is added to the cost. The majority of affected businesses mail the report
to the Division, and this adds an estimated $1 for paper, envelope and postage.
Combining the above costs, the total estimated cost per affected business in this
category is $8.50 per month. The total cost per month for all affected businesses in this
category is $2,346, times 12 months equals $28,152 per year, aggregate of all 276
affected businesses in this group. It is unknown if any business incurred computer
programming costs to enable production of this report or if new businesses would need
to program their computers to produce this report, because other business needs may
necessitate the production of this data.
The remaining 828 affected businesses manually fill out the monthly report from a
review of their records. The Division estimates that it takes these affected businesses
approximately .5 hours to prepare the monthly report. If the value of the business' staff
time is set at $15 per hour, the report costs $7.50 to produce. The business must then
have each licensed professional staff member (funeral directors and embalmers) review
and sign the report. Affected businesses in this category tend to be the smaller affected
businesses and may have one or two professionals who must review and sign the
monthly report. The Division estimates that it takes two minutes for each professional to
review and sign the form. If the professional's time is valued at $30 per hour, the cost
per professional is $1 per month. If the affected business has on average 1.5
professionals who must review the report, the amount of $1.50 is added to the cost.
The majority of affected businesses mail the report to the Division, and this adds an
estimated $1 for paper, envelope and postage. Combining the above costs, the total
estimated cost per affected business in this category is $10.00 per month. The total
cost per month for all affected businesses in this category is $8,280, times 12 months
equals $99,360 per year, aggregate of all 828 affected businesses in this group.
Combining the two groups indicates an aggregate cost per year to affected businesses
of $127,512 (28,152 + 99,360). When multiplying this by five years, it indicates a fiveyear cost of $637,560. In addition, there may have been one-time programming costs
for the computerized group.
Is this rule likely to have an adverse impact on economic growth, private sector job
creation or employment, or private sector investment in excess of $1 million in the
aggregate within five years after the implementation of the rule?
The Division answers this question in the negative. The rule has been in effect since
approximately 1979. It is not at all controversial in the deathcare industry.
Is the rule likely to have an adverse impact on business competitiveness, including the
ability of persons doing business in the state to compete with persons doing business in
other states or domestic markets, productivity, or innovation in excess of $1 million in
the aggregate within five years after the implementation of the rule?
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The Division answers this question in the negative. Due to the nature of the business,
there is relatively little interstate competition among funeral establishments, direct
disposal establishments, and cinerator facilities. It is simply in the nature of things that
a person or family arranging a funeral and burial will usually want to use a fairly near-by
funeral home and cemetery. The funeral home needs to be fairly convenient to their
loved ones who will be involved in the funeral service and cemetery interment. The idea
of having their loved one's remains shipped long distances to some remote and
unknown funeral establishment and cemetery, simply for a price advantage, is not
typically attractive to families arranging funeral services. If the person already has a
spouse, child, parent, etc., buried in a particular cemetery, that will usually drive the
choice of the cemetery. If a person has had a good experience in a particular funeral
home regarding the funeral services of another person, particularly a family member,
that will typically have a very strong influence on the selection of a funeral home.
Although cremation tends to be somewhat less of a "local" business, even regarding
cremation there is typically significant consumer resistance to having their remains
shipped long distances to unknown facilities for cremation.
Is the rule likely to increase regulatory costs, including any transactional costs, in
excess of $1 million in the aggregate within five years after the implementation of the
rule?
The Division answers this question in the negative. The transactional costs identified in
this Compliance Economic Review have been in place for years, so no additional cost
will result. The continued enforcement of the rule will result in estimated aggregate
regulatory costs over five years of $637,560. See economic analysis, supra. Because
of the uncertainty of past or future programming costs, this compliance economic review
is being filed.
NUMBER AND TYPES OF INDIVIDUALS AFFECTED
There are 1,104 businesses subject to the rule, composed of 865 funeral
establishments, 169 cinerator facilities, and 70 direct disposal establishments. Each of
these is typically a corporation or a limited liability company. They range in size from
as large as staffs of 20-30 persons, to establishments having only two to four
employees.
COST TO THE AGENCY, AND TO ANY OTHER STATE AND LOCAL GOVERNMENT
ENTITIES, OF IMPLEMENTING AND ENFORCING THE PROPOSED RULE, AND ANY
ANTICIPATED EFFECT ON STATE OR LOCAL REVENUES
The Division records the receipt of each monthly report, and scans the reports into
Division records. The Division estimates that it takes on average two minutes per report
for the Division to record and scan each report. The value of Division staff doing this
work is $10 per hour, so each report costs $.33 to process. At 1,104 reports per month,
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the time cost to the Division is estimated at $368 per month. The Division uses its
general purpose scanner/copier to scan the reports, and scans them to space on the
Division's server hard drives; this equipment is used for a large number of Division
business processes, and the Division estimates that the attributable cost of equipment
used is $20 per month. The total monthly cost to the Division is thus $388. For the sixty
months of the 5 year period, the cost to the Division is $23,280.
TRANSACTIONAL COSTS
Transactional costs are primarily the time it takes the affected businesses to fill out the
reports.
The Division estimates that 25% (276) of the affected businesses that file the reports
use a consolidated computer software program or a suite of related programs to run
their business. Where this is the case, the affected business enters the deceased
information into the system for invoicing and accounts receivable purposes, and the
information, once entered, is available and used to produce these monthly reports.
These software programs have a function (a button) to produce these monthly reports.
For affected businesses using such software, there is no significant additional cost to
produce the reports. The Division estimates that production of the report by affected
businesses in this category takes ten minutes. If the value of the business' staff time is
set at $15 per hour, the report costs $2.50 to produce the report. The business must
then have each licensed professional staff (funeral directors and embalmers) on staff
review and sign the report. Affected businesses in this category tend to be the larger
affected businesses and may have four to six professionals who must review and sign
the monthly report. The Division estimates that it takes two minutes for each
professional to review and sign the form. If the professional's time is valued at $30 per
hour, the cost per professional is $1 per month. If the affected business has five
professionals who must review the report, the amount of $5 is added to the cost. The
majority of affected businesses mail the report to the Division, and this adds an
estimated $1 for paper, envelope and postage. Combining the above costs, the total
estimated cost per affected business in this category is $8.50 per month. The total cost
per month for all affected businesses in this category is $2,346, times 12 months equals
$28,152 per year, aggregate of all 276 affected businesses in this group.
The remaining 828 affected businesses manually fill out the monthly report from a
review of their records. The Division estimates that it takes these affected businesses
approximately .5 hours to prepare the monthly report. If the value of the business' staff
time is set at $15 per hour, it costs $7.50 to produce the report. The business must
then have each licensed professional staff (funeral directors and embalmers) on staff
review and sign the report. Affected businesses in this category tend to be the smaller
affected businesses and may have one or two professionals who must review and sign
the monthly report. The Division estimates that it takes two minutes for each
professional to review and sign the form. If the professional's time is valued at $30 per
hour, the cost per professional is $1 per month. If the affected business has on average
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1.5 professionals who must review the report, the amount of $1.50 is added to the cost.
The majority of affected businesses mail the report to the Division, and this adds an
estimated $1 for paper, envelope and postage. Combining the above costs, the total
estimated cost per affected business in this category is $10.00 per month. The total
cost per month for all affected businesses in this category is $8,280, times 12 months
equals $99,360 per year, aggregate of all 828 affected businesses in this group.
ANALYSIS OF THE IMPACT ON SMALL BUSINESSES
The Division estimates that 900 of the approximately 1,104 affected businesses are
small businesses. The Division estimates that it takes these affected small businesses
approximately .5 hours to prepare the monthly report. If the value of the small business'
staff time is set at $15 per hour, it costs $7.50 to produce the report. The small
business must then have each licensed professional staff (funeral directors and
embalmers) on staff review and sign the report. Affected small businesses in this
category are estimated to have one or two professionals who must review and sign the
monthly report. The Division estimates that it takes two minutes for each professional to
review and sign the form. If the professional's time is valued at $30 per hour, the cost
per professional is $1 per month. If the affected business has on average 1.5
professionals who must review the report, the amount of $1.50 is added to the cost.
The majority of affected businesses mail the report to the Division, and this adds an
estimated $1 for paper, envelope and postage. Combining the above costs, the total
estimated cost per affected small business in this category is $10.00 per month, times
12 months equals $120 per year per small business.
ANY ADDITIONAL INFORMATION THAT THE AGENCY DETERMINES MAY BE USEFUL
The agency has no other additional information that the agency has determined may be
useful.
REGULATORY ALTERNATIVES SUBMITTED
No regulatory alternatives were submitted.
EXPLANATION OF THE METHODOLOGY USED TO CONDUCT THE ANALYSIS
The Division maintains a database from which it has extracted reliable data as to
number of licenses issued per year, date of birth of applicant, and other pertinent data.
The Division has staff that have extensive experience in deathcare industry regulation
and, to a significant extent, the economics and empirical characteristics of deathcare
industry businesses, particularly deathcare industry licensees. The Division has
informally queried deathcare industry members for their input on issues or questions
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pertinent herein. The Division has diligently collated and applied all of said data to
produce the good faith estimates of regulatory costs presented herein.
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